arrears leveraging pilot project: outcomes achieved & lessons learned pamela c. ovwigho, phd...

ARREARS LEVERAGING PILOT PROJECT:OUTCOMES ACHIEVED & LESSONS LEARNED

Pamela C. Ovwigho, PhDCorrene Saunders, BACatherine E. Born, PhD

Paper presented at the 45th Annual Workshop of the National Association for Welfare Research and Statistics

This research was funded by The Maryland Department of Human Resources,Child Support Enforcement Administration

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THE PROBLEM:CHILD SUPPORT ARREARS OWED BY LOW-INCOME OBLIGORS

State-owed child support arrears accrue when obligors fail to pay current support and their low-income children are instead supported through the TANF program.

Nationally, 70% of certified arrears owed to families and states are owed by persons with reported earnings of less than $10,000 (OCSE, 2004).

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THE PROBLEM:CHILD SUPPORT ARREARS OWED BY LOW-INCOME OBLIGORS

Low-income obligors may be discouraged or deterred from paying any support in order to avoid being ‘caught’, which could lead to a further absence from their children’s lives (Barfield & Meyer, 2003).

States may be penalized for low rates of collection on cases with arrears balances and on current support (Pearson & Griswold, 2001).

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Arrears Leveraging Pilot Program:Description and Sample

Approximately 150 applicants requested enrollment between November 2000 and March 2004.

Final sample Included 74 eligible participants who:

Had at least one current/active child support case in Baltimore City with state-owed arrears, and

Successfully completed an employment program offered by one of six local Community-Based Organizations (CBOs).

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Arrears Leveraging Pilot Program:Description and Sample

25% of State-Owed Arrears eligible for forgiveness upon completion of CBO program.

Remaining balance divided into 4 equal parts, each of which was eligible for forgiveness after 6 consecutive months of current child support payments.

Allowed up to 5 years to complete the program; participants were dropped after 7 consecutive months of non-payment.

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$4,000$3,000

$3,000

$3,000

$3,000

Arrears Leveraging Pilot Program:Description and Sample

25% of Original Balance forgiven

upon completion of CBO

Example:

Total Obligation of $16,000

¼ of Remaining Balance forgiven

for each six consecutive month-

period of current support payments

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Our Study:Methods and Data Sources

Program Participation records w/date of entry and court-approved expungements.

State administrative data:

public welfare program utilization;

UI-covered employment;

and child support enforcement.

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Our Study:Methods and Data Sources

Division of Sample into 3 groups:

Stage 1 (45.9%, n=34): participants who completed the CBO program, and received a 25% expungement, but went no further in the pilot program.

Stages 2, 3, or 4 (33.8%, n=25): participants who completed the CBO program as well as 1, 2, or 3 six-month periods of consecutive current support, but still had a balance of arrears when they dropped out of the pilot program.

Stage 5 (20.3%, n=15): participants who completed all stages of the pilot program, and, as a result, were eligible to receive complete forgiveness of their state-owed arrears debt.

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Findings:Program Progress

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Findings:Characteristics of Program Participants

Demographics: 97.3% male, 59.5% African American, 34.5 years old (average).

Participants owed an average $231.60/month in current support and $41.80/month in other support, typically for arrears, for a total of $273.40/month.

In total, participants owed an average of $10,479.50 in state-owed arrears, and $5,609.35 in custodian-owed arrears, for a total arrears debt of $16,088.85/participant.

The sum of all state-owed arrears for the entire group was $1.2 million ($1,174,485.84).

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Findings:Public Welfare Utilization

Public welfare includes receipt of Temporary Cash Assistance (TCA), Food Stamps, Medical Assistance, and Temporary Disability Assistance Program (TDAP):

39.2% received benefits in the 2 years before enrollment in the ALPP

28.4% received benefits in the 1st year after enrollment

20.8% received benefits in the 2nd year after enrollment

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Findings:Quarterly Earnings Before and After Enrollment

$3,717

$2,701

$2,117

$2,541

$3,711

$4,943

$4,457

$2,363

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Stage 1 Stages 2 to 4* Stage 5 Tota l**

Note: n=52, *p<.05, **p<.01, ***p<.001

Two Years Before Enrollment Two Years After Enrollment**

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14.0815.35 14.9815.58

14.24

10.83

13.9615.80

0

4

8

12

16

20

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Stage 1 Stages 2 to 4 Stage 5 Tota l

Two Years Before Enrollment Two Years After Enrollment

Average # of Months of TCA receipt Before and After ALPP Enrollment

Findings:TANF Cash Benefit Receipt of Participants’ Children

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Findings:Child Support Outcomes For All Participants

2.9

6.32 6.69

0

2

4

6

8

10

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1 Year Before 1st Year After 2nd Year After

Average Number of Months Current Child Support Was

Paid 25.3%

64.1%

89.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

1 YearBefore

1st Year After 2nd YearAfter

Average % of Current Support Paid

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Findings:Child Support Outcomes For Separate Groups

1.41

3.363.78

4.21

8.17 7.81

4.2

9.8710.73

0

2

4

6

8

10

12

1 Year Before 1st Year After 2nd Year After

Number of Months of Current Support Paid Before and After ALPP Enrollment

Stage 1 Participants Stages 2, 3 & 4 Participants* Stage 5 Participants

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Findings:Child Support Outcomes For Separate Groups

31.5% 25.9%

82.3%

159.1%

106.8%

12.2%

37.1% 35.9%

131.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

180.0%

1 Year Before 1st Year After 2nd Year After

Mean Percent of Current Support Paid Before and After ALPP Enrollment

Stage 1 Participants Stages 2, 3 & 4 Participants* Stage 5 Participants

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Findings:Arrears Expungement

$1,964

$6,468

$9,206

$4,954

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

Stage 1 Stages 2 to 4 Stage 5 Total

Average Amount of Arrears Forgiven Per Obligor

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Findings:Current Support Paid vs. Arrears Forgiven

$167,763

$373,840

$161,708

$138,090

$124,646

$81,430

$366,576

$66,778

$0 $100,000 $200,000 $300,000 $400,000

Stage 1

Stages 2 to 4

Stage 5

Total

Total Support Payments

Total Expungements

$7,264 difference

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Conclusions:Outcomes Achieved

Stage 5 participants (those who completed all phases of the program) had better outcomes in employment, earnings and child support than other participants.

There were no statistically significant pre-program differences among the three groups on demographic characteristics, child support order amounts, or the amounts of state-owed and total arrears.

Participants worked more, earned more, paid more child support, and paid more often than they had before enrolling in the program.

Participants paid more in current support than was forgiven in state-owed arrears, by about $7,000.

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Conclusions:ALPP Limitations

Lack of data on those who were eligible for the program but did not complete the CBO employment program.

Implementation difficulties, including lengthy delays between achievement of program milestones and actual forgiveness of arrears.

Improvement in outcomes likely due to participation in CBO employment-focused programs and/or continued child support enforcement methods.

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Recommendations:Lessons Learned

Further testing and evaluation of creative employment and/or expungement programs for the non-custodial parents population should be pursued.

It is highly recommended that any project include:

An employment services component;

Strong relationships, forged in advance of the project start date, among all organizations that will be involved in the project or its evaluation, with designated liaisons; and

Carefully considered criteria for program eligibility.

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Recommendations:Lessons Learned

Agencies should consider the implications of having other enforcement actions occur simultaneously with an obligor’s participation in an arrears leveraging project, and the possible need for support order modifications for arrears leveraging participants.

At minimum, our findings indicate that through creative programs child support agencies can turn non-payers into payers, even those who conventional wisdom would suggest have a very low likelihood of success.

Thank You!For further information on this study,

please send an e-mail to:csaunders@ssw.umaryland.edu

Or visit our website:www.familywelfare.umaryland.edu

Family Welfare Research and Training GroupUniversity of Maryland School of Social Work

525 West Redwood StreetBaltimore, MD 21201

(410) 706-5201